Closing costs

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Closing costs

All the expenses involved in transferring ownership of real estate.

Closing Costs

Costs associated with the completion of a sale of real estate. Closing costs are not usually included in the sale price of the property. Some examples of closing costs are appraisal fees, deed-recording fees, and applicable taxes. Mortgage loans often include money for closing costs. They are also called settlement costs.

Closing costs.

When you purchase real estate, there are expenses -- known as closing costs -- you pay to finalize the transaction, over and above the cost of the property.

In some cases, the seller may offer to pay certain closing costs to attract buyers or close the sale more quickly. Closing costs vary depending on the area where the property is located and are either prepaid or non-recurring.

Prepaid costs are expenses that recur periodically, including home insurance premiums and real estate taxes.

Non-recurring costs pay for securing a mortgage and transferring the property, and may include a filing fee to record the transfer of ownership, mortgage tax, attorneys' fees, credit check fees, title search and title insurance expenses, home inspection fees, an appraisal fee, and any points, or up-front interest charges, you have agreed to pay the lender.

The lender will give you a good faith estimate (GFE) of your closing costs before the closing date, so you'll know approximately how much money you need to have available at closing -- usually 5% to 10% of your mortgage.

Many closing costs are tax deductible, so it's a good idea to consult with your tax adviser.

closing costs

Technically, only those fees and expenses necessary to close a sale or a mortgage, such as document preparation, the fee for the actual closing itself, and perhaps overnight delivery charges.In common language,though,the phrase has come to mean all expenses associated with a closing with the exception of the actual purchase price of the property and any lender fees.Rather than specifying that a buyer and seller will share closing costs equally,the better practice would be to spell out all anticipated expenses and the allocation for payment.

Examples of potential expenses include

• Preparation of closing documents
• Deed preparation
• Expenses associated with clearing title defects, such as preparation of affidavits or quit- claim deeds
• Title inspection
• Owners' title insurance
• Lender's title insurance
• Lender-required policy endorsements
• Deed recordation fees
• Mortgage recordation fees
• Transfer taxes (which can be sizable in the case of the New York mansion tax, for example)
• Closing agent fees
• Transfer fees imposed by condos, homeowners associations, or co-op boards
• Listing agent's commission
• Selling agent's commission
• Cost of wood infestation report and clearance letter
• Cost of survey
• Cost of appraisal
• Cost of required inspections
• Escrow fees
• Prepayment penalties
• Prorated real estate taxes, insurance, and/or dues

Closing Costs

Costs that the borrower must pay at the time of closing,in addition to the down payment.

See Settlement Costs.

References in periodicals archive ?
The "ClosingCorp National Closing Costs Survey" of more than 1,000 adults, also showed that most people learn about closing costs from realtors, or by doing their own research.
Because the calculator also includes ClosingCorp's accurate closing cost data, borrowers can estimate total closing costs for any residence in the U.
Qualified homebuyers may receive up to $1,500 in closing costs assistance based on either of the following criteria:
Lenders are relying on our SmartGFE tools to deliver the most accurate closing cost data possible.
These upfront closing cost disclosures are governed by the Real Estate Settlement Procedures Act (RESPA).
17, 2014 /PRNewswire/ -- Propel Financial Services President and CEO Jack Nelson said today, in conjunction with a public meeting in Austin, that state regulators' proposed reductions in closing costs for third-party property tax payment plans are a step in the right direction.
While other calculators only provide monthly mortgage payments, ClosingCorp's SmartClosing Mortgage Calculator provides accurate closing cost data that consumers need to gauge the real costs associated with buying a home," said Ryan Whitlock, CEO of Z57.
It helps consumers understand what services they can shop for, so they not only receive the lowest interest rate and best terms, but save significantly on their closing costs as well.
Reimbursement of Closing Costs: If you pay this loan off and close the account earlier than the 36-month anniversary date of the loan closing, you will be obligated to pay PenFed a prorated amount of the closing cost credit received from PenFed.
In a nutshell, a GFE is a document that gives an estimate of all closing costs and settlement charges on a loan after it's been approved.
com partners with sellers who have available properties with closing cost assistance, enabling buyers with limited resources to have the opportunity to own a home.
com offers the consumer a variety of products, including first mortgages, variable equity lines of credit and no closing cost equity seconds.